❌❌Morning Report - Two Big Misses
Day Trading Update 5/21/26
Welcome to the morning report, where I go over the setup for the day as it relates to day trading. I’ll review levels using options gamma and show you where the support and resistance lie along with some other proprietary metrics like options skew and my very own Day Trading Bar Score that have good track records for forecasting bullish or bearish tendencies for the day.
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Today’s Setup
We got two sets of important earnings results last night and this morning and neither one was very good.
NVDA 0.00%↑ NVDA produced “good” earnings - but started to slather on a bunch of stupid stock buybacks. That is a trick CEOs use when they are running out of good things to say. That’s not what I wanted to hear. Buying your own stock back at these valuations is simple destruction of capital. NVDA could have given back a special Windfall Dividend to investors, but instead chose to be greedy and for that, they should pay.
Stock is only down 0.2% so far, but the reaction was poor initially and it was down 1.3-1.5% after the announcement. The Weekly Charts look like this. Sell Setups are present (Red Dots).
Why isn’t the stock down more? Well, two reasons - one is that there is a lot of positioning on either side of the spectrum here (circled in Pink). If price stays in between perfectly like it is right now, then all those Options Buyers gets screwed and the premiums are collected. Once these options expire and the idiots that bet on the earnings move end up moving along then it can unclench and move. That might happen this morning, that might happen this afternoon or it could be later until tomorrow.
Just to prove my point - I’ll show you what the 5/26 Expiration looks like. Quite a bit different, isn’t it? Full of Calls. Jam packed. And earnings really weren’t that great.
So that’s NVDA. Let’s talk about WMT.
WMT Warns
Wal-Mart is a pretty straight shooter with regard to earnings. They basically tell it like it is. And what they said today was terrible.
Basically, they missed on the bottom line, but the top line was fine. Stock is down 2%.
The wrinkle that was most interesting to me was that they said a lot of people got Tax Refunds that were cushioning the blow of High Gas prices (at least in the First Quarter). WMT estimated that the cushion is gone, and they are seeing material weakness creep in now that the Tax Refunds are spent. Target said almost the same thing just a day or two ago. Home Depot, same.
Old folks got a new deduction of $6,000 a person this year that everyone else didn’t get, so that cohort probably has more spending to do (although they already do a lot of spending). 64% of old folks don’t pay taxes anyway on the Checks they get from the Government and that number went up to 88% or so now with the deductions. Ironically, for the rest of us that need those Government Checks later in life, this makes it less likely they will be there for us.
The other big thing was no tax on tips or overtime. Overall, for those few workers that do rely on tips, the refund was about 11% higher than the prior year. Again - it’s something, but not a lot.
Now, looking at all that, we see the average refund was only $346 higher if you take the refunds and spread it over the entire tax base. That’s why a lot of people are kind of pissed off right now. I know when I talked to my parents, they told me they didn’t get anything and ended up paying MORE this year in taxes, not less. So, they didn’t feel a benefit. And they are as blood red MAGA as it gets.
So - bottom line is that the consumer is really in a rough place right now and WMT is warning us it’s about to get worse - but we knew that already.
Quantum Pump and Dump
The Trump admin is back at it again with State / Crony Capitalism. They are pumping a bunch of the Quantum Computing Stocks, doling out handouts from the Commerce Department for equity stakes, picking winners and losers from their donation base. I’m sure Cantor Fitzgerald doesn’t own any of these stocks and I’m sure Ludnick’s Family won’t make a dime off the handouts.
The US Government is buying these stocks when they are going parabolic and look like this. Not smart at all.
They did this not long ago with Coal stocks.
All that did was top tick it. The ETF is down 8% since then, and it’s been dead money during this Napalm Run higher off the Iran War lows. Pump n’ Dump. Whatever happened to the attitude that the US Government screws up everything it gets involved with? Sad!
I warned everyone not to chase the Coal Scam when it happened back in February. You can read about that below.
I’ll do the same here with these Quantum Computing stocks today. You are Exit Liquidity for C-Suite types that donate to Trump. Please don’t waste your money chasing this stuff.